CHEMICAL giant Ineos has warned the Government it needs a #360m handout to prevent more than 2,000 jobs being axed at Runcorn.

CHEMICAL giant Ineos has warned the Government it needs a #360m handout to prevent more than 2,000 jobs being axed at Runcorn.

Ineos Chlor, which bought the site from ICI 12 months ago in a #325m deal, says jobs are at risk if funds cannot be raised for a #635m revamp of the plant.

The global chemical firm says decades of under investment and neglect by ICI is to blame for the crisis.

Now Ineos is planning a #65m legal claim against ICI alleging it was misled as to the true condition of the chlorine plant.

However, Ineos staff spent months assessing the state of the Runcorn plant before the purchase was agreed. ICI says the amount of time spent investigating the plant was 'unprecedented' in the chemical industry.

Sources also believe Ineos wants the cancellation of a #100m debt from a loan made by ICI to Ineos at the time of the takeover.

As part of the revamp, Ineos claims it needs more than #200m to replace the mercury cell roms used to make chlorine and caustic soda and #170m to refurbish and maintain buildings and equipment that date back nearly 30 years. The final bill is expected to top #635m.

While the company will be able to fund a large proportion of the work itself, it still faces a #360m shortfall.

Ineos will be asking for cash from the Government to keep the business afloat and any money raised could be used to raise fresh borrowing against an investment programme.

Sources claim the Runcorn plant would 'die a slow death' if the funds could not be raised.

But ICI bosses maintain Ineos chiefs were well aware of the condition of the plant when they bought it and that their financial problems are a result of an acceleration in the firm's investment programme.

However, ICI this week confirmed it would be supporting the Ineos application for Government cash.

Industry experts believe the closure of the Runcorn plant, which produces 80% of Britain's supply of chlorine and caustic soda could threaten more than 100,000 jobs nationwide.

The General Municipal and Boilermaker's union which represents workers at the plant, is backing Ineos's application for cash.

Union bosses say urgent investment is needed in the chemical industry if thousands of jobs are to be saved.

GMB spokesman Terry Mellor said: 'It is not a surprise to us because Ineos has been telling us about the problems they have got and the investment needed.

'We don't want to get involved in who is to blame, whatever happens and whoever is to blame it is our members that are going to suffer the consequences.

'Within weeks of the takeover they announced 613 redundancies, 450 at Runcorn and Northwich, and any more on top of that would be of great concern.

'We've been lobbying the Government and we will do anything we can to support Ineos's efforts to help the plant survive to secure the long-term future for our members.

'There are 260,000 jobs in the chemical industry. We see the Government bending the rules to help industries such as farming but you don't see those industries facing the kind of job losses we are.

Ineos's purchase of the ICI site at Runcorn made it one of the biggest operators in the industry.

As part of the deal, smaller sites at Crosfield in Warrington and Klea in Runcorn were also acquired.

The Chlor chemicals business produces chlorine, Klea makes gases for refrigerators and Crosfield produces materials used in detergent and paper manufacture.

Ineos guaranteed the terms and conditions of the 2,325-strong workforce for the next four years during takeover talks but revised its plans after moving in.

The depressed price of caustic and the strength of sterling have led to deficits in recent years.

The industrial chemicals division lost #10m in the third quarter of last year, although this was well down on the previous year's #50m deficit for the same period.

Large amounts of money are needed to modernise cells in the chlorine works some of which are using outdated technology.